UPDATE 1-U.S. is 'taking from the young,' top business lobbyist says

Reuters Staff

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By Andy Sullivan

WASHINGTON, Jan 8 (Reuters) - The top lobbyist in Washington for American business warned in unusually stark terms on Wednesday that younger Americans will face diminished economic prospects in coming years unless the United States reins in spending on the elderly and improves its education system.

“I worry that for the first time in history, we’re in a situation where America is taking from the young in order to support the old,” Thomas Donohue, the head of the U.S. Chamber of Commerce, said in a speech that laid out the powerful business group’s agenda.

Donohue’s remarks reflect the bitter residue of a years-long budget battle that has largely failed to tackle the nation’s long-term fiscal problems, as well as a new focus on inequality in Washington.

As in other areas, the business group is likely to clash with the Obama administration on some of its efforts to narrow the gap between the rich and the poor, even as it supports other approaches. The Chamber will back the administration’s push to impose common academic standards on a primary education system that is largely administered at the state and local level, Donohue said.

“If our nation doesn’t get damn serious about the millions of young people who drop out of school, or who graduate unable to master the most basic skills and work habits, nothing else we do or try is going to work,” he said.

The business group does not back Obama’s effort to boost the minimum wage, Donohue said, and will oppose other efforts that would impose more regulations on business or slow economic growth.

The Chamber will also try to build public support for reining in the expensive, but popular, health and pension programs for the elderly that are projected to drive the U.S. public debt in coming decades, Donohue said, though he acknowledged that effort is unlikely to bear fruit soon.

“Entitlement reform is not going to get done in a serious way for a couple of years yet. We have to work up to this,” he said.

With a lobbying budget that places it among the top interest groups in Washington, the U.S. Chamber has been a high-profile antagonist of an administration that it sees as hostile to business. The group led the push against Obama’s signature healthcare law and has opposed efforts to curb greenhouse gases and tighten financial regulations.

But over the past year, the Chamber and the White House have pursued common goals as both have sought to overhaul immigration rules, expand global trade and boost highway spending. Those efforts will continue this year, Donohue said.

At the same time, the Chamber found itself at odds with some of the more strident elements of the Republican party as they refused to fund wide swaths of the government and pushed the country to the brink of default in a failed effort to undercut Obama’s signature health care law in October.

That division is likely to widen over the coming year, as the Chamber backs more pragmatic Republican candidates in primary elections. The Chamber has already spent money to back candidates in West Virginia, Idaho, Kentucky and Alabama and is considering whether to intervene in about six primary races right now, Donohue said.

“People who walk in and announce, ‘I‘m going to run for the House or the Senate and my idea is to burn down the town,’ we’re not interested in them,” he told a press conference.

The Chamber could further disappoint conservatives by seeking to modify the health reform law known as “Obamacare” rather than push for its repeal.

“We’re not going to get rid of that bill, so we’re going to have to devise ways to make it work,” Donohue said. (Reporting by Andy Sullivan; Editing by Karey Van Hall and Dan Grebler)